“We are hearing the bid for treasuries is coming from across the investment spectrum — HFs, Long Onlys, Pensions, Asians, Banks, Insurers, etc…,” said Stifel Nicolaus’ Dave Lutz. “Heck of a bet into the Non-Farm payroll print tomorrow.”

Strong economic data like today’s ISM report is supposed to encourage the Federal Reserve to want to taper quantitative easing and raise rates more aggressively sooner than later, which means higher interest rates. This is why people are perplexed by the falling rates.

Among other things, Lutz believes that much of the buying is a result of the fact that traders were just too short the Treasury market.

“CFTC data showed that short positions in 10-year note futures were near four-year highs,” said Lutz.